SBP reserves drop $55m to $12bn

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KARACHI: Foreign exchange reserves held by the State Bank of Pakistan (SBP) decreased by $55 million to $12,073.9 million during the week ending May 21, 2020, according to data released by the central bank on Thursday.

The SBP stated that the decrease could be attributed to external debt repayments.

Net foreign reserves held by commercial banks increased slightly, from $6,489 million to $6,524.0 million.

The total liquid foreign reserves held by the country fell marginally from $18,618.3 million in the week ending May 15, to $18,597.9 million during the week under review.

This is the second drop in foreign exchange reserves recorded in May. The last time reserves actually rose was in the week ending April 30, increasing by $259 million to $12,329.4 million. At the time the SBP did not cite a reason for the increase.

From the beginning of 2020, SBP reserves steadily increased to a peak of $12.8 billion in the first week of March. However, beginning mid-March, reserves began to decline. SBP reserves fell from $12.8 billion to $10.8 billion between March 13 and April 17.

However, in the week ending April 24, SBP reserves got some significant help from the IMF, jumping from $10,889.2 million to $12,070.3 million. This can be mainly attributed to the $1.39 billion received from the IMF under the Rapid Financing Instrument (RFI), to address the economic impact of the Covid-19 shock.

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